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Manhattan Company

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Submitted By nounou86
Words 382
Pages 2
Jerry Mays
Owner of Manhattan Company
Dear Mr. Mays,
While going reviewing your internal control, I here are couple of information I was able to gather about your internal control system in place. The information collected is as follow: no list of the checks is prepared; the mail is opened either by the cashier or the employee who maintains the accounts receivable records; mail receipts are deposited in the bank weekly by the cashier. For a better safeguard assets and enhance the accuracy and reliability of accounting records, a company needs to follow specific control principles which are establishment of responsibility; physical mechanical, and electronic controls; segregation of duties, independent internal verification, documentation procedures and other controls ( (weygandt, kimmel, & kieso, 2010). According to the information gathered from your company, these specific control principles are not met.
After reviewing your company’s internal control, here are my recommendations. First of all the responsibility of each employee should be establish. There should be a team of employee who are in charge of opening the mails and there should be a rotation of person weekly to avoid any complicity among employee. A clear record of all the checks received should be kept and that should be done with someone else than the mail opener. This implies that a rotation of employees who are in charge of keeping the record of received checks should be kept also (this takes care of establishing responsibility). The cashier should not be involved in handling the received checks neither should the employee who maintains the account receivable should be (segregation of duties). Both cashier and accounting employee should be segregation of duties also.
While accounting employee maintains cash balance per book, cashier should be maintaining custody of cash on hand. These

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